Event Jennifer Westacott interview with ABC RN – PM

Speaker Jennifer Westacott

Date Tuesday, 2 April 2019

Topics Budget 2019 and Newstart

E&OE

Linda Mottram, host: Jennifer Westacott is the chief executive of the Business Council of Australia. She joins us along with Peter Ryan, our business correspondent. Jennifer, welcome.

Jennifer Westacott, chief executive Business Council of Australia: Thanks.

Linda: If I could ask you first, just hearing that story, it's almost unimaginable that neither side of politics has managed to...

Jennifer: I just can't. I can't understand. I'm bewildered about why this is so difficult. I mean you have to do a lot of things, not just increase the allowance. You've got to really work hard on people who are very disadvantaged because if you look at the numbers, there are 28,000 people who have been on Newstart for 10 years and over 60 per cent of people have been on it for more than two years. So we've got, kind of, an issue here about very disadvantaged workers and how we get them the right training and assistance. But, you know, I'm always bewildered by this. This is not a huge number of people in Australia and to me it's just a, kind of, moral issue. To ask people to live on $40 a day and to hear someone how they, kind of, make those decisions day in, day out. You know, we just can't keep kicking this down the road. 

Linda: And just briefly, there is some training and measures in the budget. Do you see anything that approximates with that?

Jennifer: Look there's a few good things in the budget, we'll come back to the broader budget question in a minute. But there's one initiative which I've been pushing for very hard which is do something about literacy, programs for people who are working not just for people from a migrant background. It's hugely important because 30 per cent of employers say that they are dealing with big literacy problems in their workforce. We need to make sure that we really do something about literacy for people who are working or who are, kind of, between jobs or who are on Newstart for long periods of time. I would still love to see a review of literacy programs across the country. 

Linda: Peter, on the wider questions of the budget.

Peter Ryan, host: Yeah and I will just ask a question about Newstart because we have seen forecast surpluses, we're seeing a cash splash of tax cuts. Do you think this is a mean element of the budget? 

Jennifer: Look I think the budget overall is very strong and very responsible. I think its got a great mix of pro-growth spending. It's great to see us getting back to surplus. Look, it's one issue, as I said, I just don't understand why we keep kicking the can down the road on this one. But, you know, if you look at the budget overall, some very strong pro-growth things - $100 billion of infrastructure and a lot of things in regional Australia. I was up in Townsville last week, you know, they are just crying out for infrastructure. I was in Tasmania a few weeks ago, crying out for that interconnector. So that's all really good. The tax cuts for low and middle income earners, that's good. That's a pro-growth initiative. It also helps people, particularly, as wages are stumbling, not growing as fast as they should be. The stuff around small business, the instant asset write-off, that's good pro-growth stuff. The issue, I think, is that we haven't still done anything about an economy wide incentive for companies to invest and the senate decided to give up on Australia's competitiveness when they voted down the company tax stuff. I think the real message from this budget is we have got to keep our foot on getting that surplus achieved and paying down that debt. Because, you know, you think about at a net level we paid $11 billion in interest - money that we could have spent on many other things. 

Peter: And the budget is very heavy of course of making the most of the surplus and rewarding low to middle taxpayers but we haven't really seen much in terms of economic reform and each year when you come to the budget you are asking for that. Once again, you are not seeing anything.

Jennifer: Well the one bit of economic reform in the budget is this proposal to get rid of that tax bracket and get everyone to 30 per cent. And having 94 per cent of people on a 30 per cent rate or less is huge reform. I mean, if we could get that as a country, we'd be on our way. But look, you know, it's very difficult to do some of this reform. We saw the toxic debate every time we try and do reform, every time we try and do tax reform, the tribes, you know, kind of form into their patches and we don't get much done. But at some point, no matter who is in government, is going to have to actually face into the fact that if you want investment to grow, if you want productivity to grow, if you want wages to grow, how are you going to do that when you've got one of the highest tax rates in the world and frankly a bizarre now two-tiered tax system. 

Linda: And what about the fact that we seem to be, you know, lurching according to the global headwinds? You know, suddenly there's a surge of dollars in because of commodity prices, just as suddenly that could evaporate?

Jennifer: That is so spot on Linda. You know, I make this point every year. You know, there is $104 billion of tax revenues from companies, now those are investment decisions they've made a long time ago and we've got to lock those investment decisions. We've got to lock in the next wave of big investments in mining, in manufacturing because you're absolutely right. You look at the global economy - it is very volatile. You look at the last quarter of GDP numbers, they're very slow. So, we have got to...that's the bit in the budget, to your point Peter, I'm concerned we still don't do the structural reform, but look on balance this is a pretty good budget.

Linda: We're going to have to let you go, I think. Jennifer Westacott from the Business Council, thank you very much.

Jennifer: Thanks very much.